Federal Reserve Reduces Economic Stimulus by Another $10 Billion

NEW YORK (TheStreet) -- The Federal Reserve on Wednesday cut its economic stimulus program by $10 billion to a pace of $65 billion a month, reducing its mortgage-backed security and longer-term Treasury purchases to $30 billion and $35 billion, respectively.

The decision came at the conclusion of Fed Chairman Ben Bernanke's final policy-making meeting as chief of the central bank.

"I think if they had not tapered it would have opened a bunch of questions on a lot of different fronts," Brad McMillan, chief investment officer for Commonwealth Financial, said in a phone interview. "The fact that they are starting to back off and do it in a disciplined way means that they'll be more effective at guiding the markets with words alone in the future."

The Fed also said the labor market is mixed but has shown further improvement.